India Trade & Customs Updates: Key Changes Issued Between July 4 and 11 2026

The Government of India issued several important trade and customs updates between July 4 and 11 2026. These changes cover vehicle imports under the India–UK Comprehensive Economic and Trade Agreement, customs duty concessions for electronics manufacturing, machinery used in lithium-ion cell production, and the processing of duty drawback claims under Section 74 of the Customs Act.

Here is a summary of the key developments and their practical impact on importers, exporters, manufacturers and customs brokers.

1. DGFT Notifies Vehicle TRQ Procedures Under India–UK CETA

The Directorate General of Foreign Trade issued Public Notice No. 19/2026-27 dated 9 July 2026, amending Paragraph 2.92 and Appendix 2A of the Handbook of Procedures, 2023.

The Public Notice introduces the procedure for allocating Tariff Rate Quotas, or TRQs, for eligible vehicles originating in the United Kingdom under the India–UK Comprehensive Economic and Trade Agreement.

The TRQ framework covers:

• Internal combustion engine passenger cars under HS 8703

• Electric, hybrid and hydrogen passenger cars under HS 8703

• Internal combustion engine goods vehicles under HS 8704

TRQ for ICE passenger cars

For internal combustion engine passenger cars imported as Completely Built Units, the quota is divided according to engine capacity.

In Year 1, the total quota is 20,000 vehicles, comprising:

• 10,000 vehicles for petrol engines above 3,000 cc and diesel engines above 2,500 cc

• 5,000 vehicles in the intermediate engine-capacity category

• 5,000 vehicles with engine capacity up to and including 1,500 cc

The total quota increases during the initial years, reaching 37,000 vehicles in Year 5. It then gradually decreases and settles at 15,000 vehicles annually from Year 15 onwards.

The applicable in-quota customs duty also reduces over the implementation period. For the highest engine-capacity category, the in-quota tariff begins at 30% in Year 1 and reaches 10% from Year 5 onwards.

TRQ for electric, hybrid and hydrogen cars

The TRQ for electric, hybrid and hydrogen passenger vehicles begins from Year 6.

The quota applies to two vehicle-value categories:

• Vehicles valued above £40,000 and up to £80,000 CIF

• Vehicles valued above £80,000 CIF

Vehicles valued below £40,000 CIF do not receive the in-quota tariff benefit under this framework.

The total quota starts at 4,400 vehicles in Year 6 and progressively increases to 22,000 vehicles from Year 15 onwards. The in-quota tariff eventually reduces to 10% for both eligible value categories.

TRQ for ICE goods vehicles

For internal combustion engine goods vehicles imported as Completely Built Units, the Year 1 quota is 2,500 vehicles.

The quota increases to 3,500 vehicles by Year 5 and remains at that level thereafter.

From Year 10 onwards:

• In-quota duty: 8.8%

• Out-of-quota duty: 22%

Eligibility and application requirements

Only the following entities can apply for the vehicle TRQ:

• Original Equipment Manufacturers

• Dealers or channel partners authorised by UK-based vehicle manufacturers

Each applicant must submit a pre-purchase agreement issued by the relevant OEM, specifying the quantity of vehicles agreed to be supplied during the applicable TRQ year.

Applications must be filed online through the DGFT portal under:

Import Management System → Tariff Rate Quota

The application window for each calendar year will be announced separately.

Other important conditions include:

• A valid Certificate of Origin issued by the competent UK authority must be presented at customs clearance.

• The TRQ year will run from 1 January to 31 December.

• TRQ authorisations will be issued electronically and transmitted to the Indian Customs EDI System.

• Imports will be permitted only after electronic debit of the TRQ in ICES.

• A TRQ certificate will remain valid for up to 12 months or until the end of the calendar year, whichever is earlier.

• Underutilisation may affect the importer’s allocation in the following year.

• The allocation mechanism may be reviewed from calendar year 2028.

2. Nil Customs Duty on Inputs for Specialised Display Assemblies

The Ministry of Finance issued Notification No. 25/2026-Customs dated 8 July 2026, amending Notification No. 45/2025-Customs.

The notification introduces a Nil customs duty rate for specified inputs used in manufacturing display assemblies under heading 8524 for automotive, medical and industrial applications.

The eligible inputs include:

• Display cell

• Flexible Printed Circuit Assembly

• Backlight unit

• Frame

• Anisotropic Conductive Film

The covered goods fall under tariff items 3919 90 90 or 8529 90 90.

However, the exemption does not apply to display assemblies used in:

• Cellular mobile phones

• Smart watches

• Smart meters

• LCD or LED television panels

• Interactive Flat Panel Display modules

The concession will remain effective until 31 March 2029, subject to the prescribed conditions.

Impact on manufacturers

Manufacturers of automotive, medical and industrial display systems may benefit from lower input costs. Importers should maintain proper classification, end-use and manufacturing records to demonstrate eligibility for the exemption.

3. Duty Relief for Wireless Charging Module Components

Through Notification No. 26/2026-Customs dated 8 July 2026, the government has introduced a Nil customs duty rate for specified components used in manufacturing Inductor Coil Modules for wireless charging in cellular mobile phones.

The eligible components include:

• Nano-Crystalline Assembly

• E-Shield

• PET Liner

• PC Shim with Z-Liner

• Main Stranded Coil and NFC Coil

• Neodymium-Iron-Boron magnets

The goods fall under tariff items 3919 90 90, 8505 11 90 or 8544 11 10.

The notification also defines the technical characteristics and functions of each component to support accurate classification and assessment.

The concession will remain available until 31 March 2029.

Compliance considerations

Manufacturers and importers should verify:

• The correct tariff classification

• The technical description of the imported component

• Its use in an eligible Inductor Coil Module

• Compliance with the prescribed customs conditions

• Availability of production and consumption records

4. Customs Notification Expands Machinery List for Lithium-Ion Cell Manufacturing

The Ministry of Finance issued Notification No. 27/2026-Customs dated 8 July 2026, amending Notification No. 25/2002-Customs.

The revised notification substitutes the existing entries relating to machinery and equipment used in lithium-ion cell manufacturing.

The expanded list includes around 85 types of machines, systems and supporting equipment used across different stages of battery-cell production.

Key equipment covered includes:

• Powder dryers

• Automatic feeding and blending systems

• Slurry transfer systems

• Cathode and anode coating machines

• Electrode compression and slitting machines

• Automatic winding and stacking machines

• Electrolyte filling and injection machines

• Degassing and sealing machines

• Laser and ultrasonic welding systems

• Cell formation and ageing machines

• Helium testing equipment

• Cell sorting lines

• Solvent and heat recovery systems

• Effluent treatment systems

• Final inspection and testing equipment

The list also includes selected supporting equipment such as vacuum ovens, chillers, dust collectors, cleaning systems, trays and racks.

Impact on battery manufacturers

Businesses importing machinery for lithium-ion cell production should carefully match each imported machine with:

• The equipment description mentioned in the notification

• The corresponding tariff heading or sub-heading

• The intended use in lithium-ion cell manufacturing

• The conditions prescribed under the underlying exemption notification

Technical literature, purchase orders, machine specifications and end-use documentation should clearly establish eligibility.

5. CBIC Prescribes a Standard Deficiency Memo for Section 74 Drawback Claims

The Central Board of Indirect Taxes and Customs issued Circular No. 31/2026-Customs dated 4 July 2026 concerning drawback claims filed under Section 74 of the Customs Act, 1962.

Section 74 permits eligible exporters to claim drawback of customs duties paid on imported goods when those goods are subsequently re-exported, subject to prescribed rules and conditions.

CBIC observed that there was no standard format for issuing a deficiency memo while processing such claims. The circular now directs customs field formations to use the prescribed format provided in Annexure I.

Documents that may be requested

The standard deficiency memo includes documents such as:

• Annexure II

• Drawback calculation sheet

• Copy of the Shipping Bill

• Export invoice and packing list

• Export Bill of Lading

• Copy of the Bill of Entry

• Import invoice and packing list

• Evidence of customs duty payment

• Declaration regarding non-claim of IGST, where applicable

• Certificate confirming that input tax credit, compensation cess credit or refund has not been claimed

• Notarised affidavit

• RBI permission for re-export, wherever required

• Other relevant supporting documents

Thirty-day compliance requirement

Where a drawback claim is returned through a deficiency memo, the exporter must submit the required documents or information within 30 days.

Failure to address the deficiencies within the prescribed period may result in the claim being treated as not filed under Rule 5(4)(b) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 2017.

6. Manual Container Documents and Statements Discontinued

CBIC issued Circular No. 32/2026-Customs dated 11 July 2026, revising the process for monitoring duty-free containers imported under Notification No. 104/94-Customs.

Under the existing system, shipping lines were required to manually inform Customs about container numbers and identification details when containers moved outside the customs area. Manual bonds were also debited and credited based on manifest information.

Under the revised framework:

• Manual submission of container details and statements will be discontinued.

• DG Systems will generate reports identifying containers that have not been re-exported within the stipulated six-month period.

• These reports will be made available through the ICEGATE portal.

• Shipping lines, NVOCCs, steamer agents and authorised agents must continue to execute the prescribed bond without surety.

• Ports and terminals must develop electronic gate systems to record container entry and exit.

• Customs formations must coordinate with DG Systems and port or terminal operators to automate container movement records.

The change is intended to reduce manual bond debit and credit activity, lower processing time and cost, and eliminate unnecessary physical verification at port and terminal gates.

Impact on shipping lines and ports

Shipping lines and NVOCCs should review their bond-monitoring processes and ensure that manifest data accurately reflects container movement and re-export.

Port and terminal operators should also prepare for integration with Customs systems and maintain electronic records of containers entering or leaving notified customs areas.

7. Further Extension Allowed for Re-Export of Temporary Imports

The government issued Notification No. 28/2026-Customs dated 10 July 2026, amending Notification No. 8/2016-Customs.

Notification No. 8/2016-Customs provides duty exemption for eligible goods temporarily imported for display or use at specified events, subject to prescribed conditions and re-export requirements.

The latest amendment allows the Board, in a particular case and upon sufficient cause being shown, to extend the existing two-year period by any further period it considers appropriate.

Business impact

Importers handling temporary imports for exhibitions, demonstrations or approved events may now seek additional time beyond the existing two-year limit where genuine circumstances prevent timely re-export.

However, the additional extension is not automatic. Importers should maintain proper evidence explaining the delay and submit the extension request before the applicable period expires.

8. Anti-Dumping Duty on Arylides Extended Until January 2027

The Ministry of Finance issued Notification No. 17/2026-Customs (ADD) dated 10 July 2026, extending the anti-dumping duty imposed under Notification No. 60/2021-Customs (ADD).

The duty applies to Aceto Acetyl Derivatives of aromatic or heterocyclic compounds, commonly known as Arylides, originating in or exported from China.

The anti-dumping duty will remain in force up to and including 13 January 2027, unless revoked, amended or superseded earlier.

Impact on importers

Importers dealing in covered chemical products should continue to account for the applicable anti-dumping duty while calculating landed costs.

They should also verify:

• Product description and technical characteristics

• Country of origin and export

• Applicable tariff classification

• Producer or exporter details

• Anti-dumping duty rate under the original notification

What Businesses Should Do

Importers, exporters, customs brokers, shipping lines and manufacturers should review these changes against their existing processes.

Key actions include:

• Preparing OEM agreements and origin documents for India–UK vehicle TRQ applications

• Reviewing tariff classifications and end-use records for duty concessions

• Matching lithium-ion machinery with the revised exemption entries

• Using the Section 74 deficiency memo as a pre-filing checklist

• Replacing manual container-monitoring processes with electronic records

• Monitoring re-export deadlines for temporary imports

• Continuing to account for anti-dumping duty on covered Arylides imports

Conclusion

The latest DGFT and CBIC measures combine duty relief, trade facilitation, manufacturing support and stronger compliance controls.

The updates simplify container monitoring, provide greater flexibility for temporary imports, extend an existing trade-remedy measure and introduce new concessions for electronics and battery manufacturing. At the same time, businesses must continue to maintain accurate classification, origin, end-use, re-export and drawback documentation.

Importers, exporters, customs brokers, shipping lines, OEMs and compliance teams should review the relevant notifications and update their systems and internal procedures accordingly.